Note 5 - Securities

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 5: Securities

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities available for sale by major security type are as follows.

	September 30, 2013
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for Sale:
U.S. Treasury	$	2,001	$	11	$	---	$	2,012
U.S. Government agencies		169,815		253		17,925		152,143
Mortgage-backed securities		2,919		234		---		3,153
States and political subdivisions		23,742		785		123		24,404
Corporate		8,805		113		541		8,377
Other securities		2,151		---		15		2,136
Total	$	209,433	$	1,396	$	18,604	$	192,225

	December 31, 2012
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for Sale:
U.S. Treasury	$	2,005	$	68	$	---	$	2,073
U.S. Government agencies		128,805		1,381		622		129,564
Mortgage-backed securities		4,202		367		---		4,569
States and political subdivisions		35,029		1,753		3		36,779
Corporate		14,207		368		---		14,575
Other securities		2,419		9		173		2,255
Total	$	186,667	$	3,946	$	798	$	189,815

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities held to maturity by major security type are as follows.

	September 30, 2013
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to Maturity:
U.S. Government agencies	$	13,977	$	315	$	1,025	$	13,267
Mortgage-backed securities		547		55		---		602
States and political subdivisions		150,228		3,158		6,579		146,807
Total	$	164,752	$	3,528	$	7,604	$	160,676

	December 31, 2012
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to Maturity:
U.S. Government agencies	$	7,988	$	563	$	---	$	8,551
Mortgage-backed securities		691		73		---		764
States and political subdivisions		151,209		9,880		216		160,873
Corporate		651		7		---		658
Total	$	160,539	$	10,523	$	216	$	170,846

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows.

	September 30, 2013
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Securities:
U.S. Government agencies	$	156,170	$	18,542	$	2,608	$	408
States and political subdivisions		57,677		6,593		850		109
Corporate		5,477		541		---		---
Other securities		---		---		174		15
Total	$	219,324	$	25,676	$	3,632	$	532

	December 31, 2012
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Securities:
U.S. Government agencies	$	44,351	$	622	$	---	$	---
States and political subdivisions		9,358		216		482		3
Other securities		---		---		133		172
Total	$	53,709	$	838	$	615	$	175

The Company had 278 securities with a fair value of $222,956 which were temporarily impaired at September 30, 2013.  The total unrealized loss on these securities was $26,208. Of the temporarily impaired total, five securities with a fair value of $3,632 and an unrealized loss of $532 have been in a continuous loss position for twelve months or more. The Company has determined that these securities are temporarily impaired at September 30, 2013 for the reasons set out below.

U.S. Government agencies. The unrealized losses in this category of investments were caused by interest rate and market fluctuations. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. The Company is monitoring bond market trends and developing strategies to address unrealized losses. At this time the unrealized losses are not considered to be other-than-temporarily impaired.

States and political subdivisions. This category’s unrealized losses are primarily the result of interest rate and market fluctuations. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and it is not likely that the Company will be required to sell any of the investments before recovery of its amortized cost basis, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Corporate. The Company’s unrealized losses in corporate debt securities are related to interest rate and market fluctuations. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments before recovery of its amortized cost basis, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Other securities. The Company holds an investment in an LLC and a small amount of community bank stock. The value of these investments has been negatively affected by market conditions. Because the Company does not intend to sell these investments before recovery of amortized cost basis, the Company does not consider these investments to be other-than-temporarily impaired.

As a member of the Federal Reserve and the Federal Home Loan Bank (“FHLB”) of Atlanta, NBB is required to maintain certain minimum investments in the common stock of those entities. Required levels of investment are based upon NBB’s capital and a percentage of qualifying assets. In addition, NBB is eligible to borrow from the FHLB with borrowings collateralized by qualifying assets, primarily residential mortgage loans and NBB’s capital stock investment in the FHLB. Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB may declare dividends on the stock. Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at September 30, 2013, management did not consider there to be any impairment.

Management regularly monitors the credit quality of the investment portfolio. Changes in ratings are noted and follow-up research on the issuer is undertaken when warranted. Management intends to carefully follow any changes in bond quality.